Study Guide for Microeconomics
9th Edition
ISBN: 9780134741123
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON
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Chapter 19, Problem 3RQ
To determine
Rule of thumb.
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Why might the multiple-play ultimatum game have a different result than the single-play ultimatum game?
In the multiple-play ultimatum game, the first player generally offers less money to the second player than in the single-play ultimatum game.
The multiple-play ultimatum game leads to a simpler equilibrium: the first player offers exactly half of the total sum to the second player.
The multiple-play ultimatum game allows for players to send signals. Therefore, the receiver can punish a player who doesn’t share enough.
The multiple-play ultimatum game generally results in less cooperation because both players fall into a back-and-forth pattern of trying to punish the other player.
How do unanticipated changes affect market players' economic decisions?
There are many real-world examples of the prisoner's dilemma. Climate change is one such example. In your writting, include the following:
A. How is a country's decision whether to reduce carbon emissions in order to minimize climate change an example of a prisoner's dilemma? What is the optimal outcome? What is the likely outcome? Explain.
B.Is there any way to get the optimal outcome? Why or why not?
Chapter 19 Solutions
Study Guide for Microeconomics
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